See exactly how much of your pay IRD deducts for your student loan: a flat 12% of every dollar above the 24,128-dollar threshold. On a $65,000 salary, that's about $4,905 a year ($409/month), stacked on top of income tax, the ACC Earner's Levy, and KiwiSaver.
Repayment rate
12%
flat, no brackets
Annual threshold
$24,128
2026 tax year
Interest
0%
while NZ-based
Cap
None
no upper limit
2026 repayment threshold
IRD deducts 12% of every dollar you earn above $24,128/year (about NZ$464/week), on top of income tax, the ACC Earner's Levy, and KiwiSaver.
Common salaries:
Annual take-home pay (after student loan)
$44,962
Per month
$3,747
Student loan repayment/yr
$4,905
Effective deduction rate
30.8%
How your $65,000 is split
$44,962
69.2%
$11,721
18.0%
$1,138
1.8%
$2,275
3.5%
$4,905
7.5%
| Gross salary | $65,000 |
| Income Tax | -$11,721 |
| ACC Earner's Levy (1.75%) | -$1,138 |
| KiwiSaver (3.5%) | -$2,275 |
| Student loan (12% above $24,128) | -$4,905 |
| Total deductions | -$20,038 |
| Net take-home (annual) | $44,962 |
Calculations use 2026/27 IRD income tax brackets, the 2026/27 ACC Earner's Levy, KiwiSaver at your selected rate, and the 2026 student loan repayment threshold ($24,128/year) at the flat 12% compulsory repayment rate. Models a New Zealand-based PAYE employee only, not self-employed or overseas-based borrowers (who repay under different rules). For precise advice consult IRD or a tax professional.
There's no bracket system here, unlike income tax. Below the $24,128 annual threshold you repay nothing at all, and above it, every extra dollar you earn has 12% deducted, with no cap and no second rate further up the income scale. It's the simplest deduction on your payslip precisely because it's a single flat rate applied to one number.
Your employer handles this automatically once you tell them (or IRD tells them) you have a student loan, applying an "SL" tax code alongside your normal PAYE code so the repayment comes out every pay run without you having to do anything manually. It sits stacked on top of income tax, the ACC Earner's Levy, and whatever KiwiSaver rate you've chosen, all deducted from the same paycheque.
Because New Zealand student loans are interest-free while you're living in the country, the calculus around extra voluntary repayments is different than in most other countries: there's no interest cost racking up in the background, so paying it off faster is a lifestyle and cashflow choice rather than something that saves you meaningful interest, unless you're planning time overseas, where interest does start to apply.
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For the 2026 tax year, the annual repayment threshold is $24,128 (about $464 a week). You only start repaying once your income for a pay period passes the equivalent weekly, fortnightly, or monthly slice of that threshold.
A flat 12% of every dollar you earn above the threshold, with no upper cap and no brackets. Unlike income tax, which uses progressive brackets, student loan repayments are a single flat rate applied to the portion of income over $24,128 a year.
Yes, if you're a PAYE employee with a student loan, your employer uses an 'SL' tax code (M SL or ME SL) and deducts the 12% repayment automatically alongside income tax, the ACC Earner's Levy, and KiwiSaver, every pay run.
Yes. It's a separate, additional compulsory deduction on top of income tax, the ACC Earner's Levy, and your chosen KiwiSaver contribution rate. On a $65,000 salary, for example, you'd owe income tax and ACC levy regardless, plus a further 12% of the roughly $40,872 above the threshold.
No, not for New Zealand-based borrowers. NZ student loans are interest-free while you live in New Zealand, which is a major difference from many other countries' student loan systems. Interest only applies to borrowers living overseas for more than 183 days.
Yes. You can make voluntary payments directly to IRD on top of your compulsory PAYE deductions to pay off your loan faster, since it's interest-free while you're NZ-based, most people prioritise other goals first, but it's a valid option if your loan balance is small and you want it cleared.
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Put the result alongside the pay available in the wider market.